37-1
37th Parliament,
1st Session
(January 29, 2001 - September 16, 2002)
Select a different session
Proceedings of the Standing Senate Committee on
National Finance
Issue 7 - Evidence
OTTAWA, Tuesday, May 8, 2001 The Standing Senate Committee on National Finance, to which was referred Bill S-23, and act to amend the Customs Act and to make related amendments to other Acts, met this day at 9:30 a.m. to give consideration to the bill. Senator Lowell Murray (Chairman) in the Chair. [English] The Chairman: Honourable senators, we have before us Bill S-23, to amend the Customs Act and to make related amendments to other acts. [Translation] It is our great pleasure to welcome the minister responsible for this bill in the House of Commons, the Honourable Martin Cauchon, Minister of National Revenue and Secretary of State (Economic Development Agency of Canada for the Regions of Quebec). I do not know if this is your first appearance before this committee, but I would like to welcome you here along with all of your officials. [English] From Revenue Canada, Customs Branch, we have Mr. Denis Lefebvre, Assistant Commissioner; Mr. Mike Jordan, Director General, Trade Policy and Interpretation Directorate; Mr. Earle Warren, Director General, Major Projects Design andDevelopment Directorate; Mr. Stephen Barry, Counsel, Legal Services; Ms Mary Anne McMahon, Senior Counsel, Legal Services; Mr. David Miller, Assistant Commissioner, Assessment and Collections Branch; and Mr. Harvey Beaulac, Assistant Commissioner, Appeals Branch. The Senate referred this bill to the committee on May 3, 2001. I do not wish to limit in any way the questioning of the minister by honourable senators. Even if I wanted to, I probably could not succeed in doing so. However, perhaps I could make a suggestion. This is a bill with 112 clauses. There is a great deal of interest both in the process and in the substance of the regulations that will ensue. I happen to know that our colleague, Senator Angus, who is joining the committee and was the spokesman for Her Majesty's Loyal Opposition on this matter, is quite interested in pursuing these regulatory matters with the officials. In any case, the minister has a cabinet meeting to attend. Thus, I will suggest to honourable senators that after we have heard the minister's opening statement we might have one round of questions, if there is an interest in any of the policy questions, and then excuse the minister so that he may attend his cabinet meeting. We will then devote most of the time to a dialogue with the officials on these regulatory matters. With that suggestion, I invite the minister to make his opening statement. [Translation] The Honourable Martin Cauchon, Minister of National Revenue, Secretary of State (Economic Development Agency of Canada for the Regions of Quebec): Mr. Chairman, this is indeed my first major appearance before a Senate committee. I will be making a brief presentation during which I would like to focus initially on the urgent and important nature of Bill S-23, not only for members of the business community and the traveling public, but for all Canadians as well. [English] Mr. Chairman, not only does the Government of Canada need this legislation to help streamline the movement of legitimate people and goods, it will allow us to focus our efforts on unknown or higher risk people and goods. Industry has also told us that it needs Bill S-23. [Translation] Since the release of the Customs "Blueprint" in 1998, wehave held broad consultations with our clients, with various stakeholders and with our partners in government. Industry support has helped us to set our priorities and to draw up a comprehensive plan which calls for a complete overhaul of the way we conduct business. Thanks to the advice received during the "Blueprint" discussions, we have devised a customs action plan which outlines a new approach and vision for our customs programs which will take us into the future. Bill S-23 will provide substantial, direct benefits to business communities. The action plan features a comprehensive risk management approach which includes self-assessment, advance information and pre-approval, all supported by technology. The provisions of Bill S-23 outline a new risk management approach, one of our biggest priorities. [English] The first management approach would be supported byan effective and fair-sanctions regime that imposes penalties according to the type and severity of the infraction. Bill S-23 provides a practical response from warnings to monetary fines that provides meaningful consequences for those who choose not to comply with the rules. Another provision of Bill S-23 will allow for a less formal administrative review, and an extension of certain time limits in the interests of fairness and harmonization with our tax legislation. This will allow clients to appeal fines or other CCRA decisions in special situations. Mr. Chairman, Bill S-23 also provides for the harmonization of certain rules that are common across CCRA programs, such as collection provisions and, for some programs, interest provisions. The harmonization of these rules will simplify the process and provide one set of rules for business. [Translation] The industry is hopeful that these legislative initiatives will be adopted as soon as possible. The government has a duty to ensure that Canadian industry continues to be very successful. The adoption of these legislative provisions and ultimately their implementation as a result of the customs action plan will save the Canadian industry millions of dollars, while streamlining trade and legitimate travel and helping us to better protect the Canadian public. The action plan makes Canadians more competitive on a global scale. [English] By providing innovative solutions to the problems we face today, it ensures that our customs processes will not be an impediment to Canadian prosperity. Bill S-23 gives us the canvas upon which to sketch our plan for border modernization. Understanding the global context and parameters within which we work is the first step. Over the last decade, the world has seen a massive expansion of international trade, investment, tourism and information technology. In fact, international trade and tourism are considered the lifeblood of the Canadian economy. [Translation] Trade agreements such as NAFTA, Open Skies and the Canada/United States of America Accord on Our Shared Border have created a huge market of over 380 million people.Canada's trade totals approximately $560 billion, or over$1.5 billion per day. It should also be noted that over110 million travelers cross our border each year, 80 per cent of whom are from the United States. [English] The final elimination of duties between Canada and the U.S. has further stimulated trade and enhanced the productive forces of both our economies. Minimizing any unnecessary interference with legitimate trade and travel is one of our priority objectives in today's changing environment. Indeed, activity at our borders is booming. All of this is great news for the Canadian economy. For the Canada Customs and Revenue Agency, it means we have to find innovative ways of managing our borders; and we have to act fast. Today, Canada's customs administration processes commercial shipments with a focus on the front-end elements incorporating assessment and verification at the time of report and release. Bill S-23 gives us what we need to develop a new customs self-assessment system and allows us to pull away from a burdensome shipment-by-shipment transaction-by-transactionsystem. [Translation] Our plan calls for the introduction of a comprehensive self-assessment system based on a post-audit process. I am sure you will agree that this is an important part of managing border activities. Business communities support this initiative and during our consultations, identified the customs self-assessment program as their biggest priority in terms of overall reform. Under this program, shipments entering Canada will be released immediately at the border with as little as three pieces of information provided for customs purposes. [English] Customs self-assessment eliminates the requirement for any transactional information related to eligible goods. We just need to know the identity of the approved importer, the approved carrier and the registered driver when CSA goods arrive at the border. Qualifying importers will send their accounting data to Canada Customs electronically, directly from their place of business. The CSA program does not involve benefits limited to the accounting and payments aspects only. It also streamlines and accelerates the customs clearance process, bringing certainty to the importation of goods. Under the old system, importers or their brokers often had to personally visit a customs office and get the paperwork checked by a customs officer, or send the information electronically before each shipment reached the border. This highly transactional approach to the business continued day in and day out, notwithstanding the low-risk nature of the goods, the carrier and the importer. [Translation] Our consultations with stakeholders showed that this way of doing business was simply not acceptable. If 1,000 of our biggest importers were to participate in the self-assessment program, 70 per cent of our imports would be released at the border more quickly. One can imagine the positive impact this would have on the Canadian economy. Low-risk travelers would be able to avail themselves of a wide range of options which would help them cross the border more easily. Today, each traveler is stopped and questioned by a customs officer upon arriving at the border, as he or she represents an unknown, and therefore genuine, risk. [English] Under pre-approved, voluntary permit programs, such as CANPASS, travellers who have an established history of compliance can apply for permits. These permits will allow them access to dedicated lanes so that they can cross the border without routine customs questioning unless they are stopped for a random check. Automated systems will confirm the traveller's identity and registration in the program. Using tools, such as links with international enforcement agencies, data from the carrierreservations system, client profiles, customs audits and driver registration, we will be able to identify and effectively attend to areas of higher and unknown risk. The CCRA has already run a highly successful pilot of the CANPASS highway program, demonstrating its viability and, indeed, its effectiveness. [Translation] Bill S-23 proposes amendments to the Customs Act which would make it possible to introduce these programs nationwide on an ongoing basis. The new Expedited Passenger Processing System will facilitate the use of a larger number of customs processes. Participants will use an automated kiosk to confirm their identity and membership in the program, and thus clear customs more quickly. [English] Use of advanced technology will allow us to better manage the risks associated with the irregular movement of people and will allow us to focus on contraband and interdiction. Mr. Chairman, our new approach is all about getting as much information as possible before goods and people arrive at the border. This will allow us to make informed decisions prior to arrival and facilitate the movement of legitimate travellers and goods. For example, with the introduction of advanced passenger information and passenger notification records as provided for in Bill S-23, customs officers will be able to have some information from commercial carriers, crew members and passengers before they arrive in Canada. [Translation] Armed in advance with this information, our customs officers will be able to make enlightened decisions prior to the arrival of shipments and passengers, which will facilitate the movement of authorized travelers and goods. Businesses or individuals with sound records should be rewarded for complying with the body of legislative provisions. [English] The dual mandate of our customs administration of trade facilitation and border protection has been seriously put to the test in recent years. [Translation] The proposed amendments to Bill S-23 will combine modern, updated risk management techniques with advance information obtained through modern technology and pre-approval processes. I wish to point out to committee members that the initiatives described in these legislative provisions will promote and facilitate Canada's competitive position on international markets. [English] Bill S-23 will also support the values of health, safety and security so strongly shared by all Canadians. Mr. Chairman, the customs program of the CCRA would like to continue to do its number one job - stopping illegal activity and protecting Canadians from all forms of threat. The passing of Bill S-23 will help us to do so. [Translation] In short, I believe that we are living today in an era of globalization, and Senators here today would agree with me. The further we evolve, the greater the need for links between different countries, whether economic or political. Unquestionably, when one considers the impact of free trade areas on markets and customs, the pressure is enormous. Trade volumes have increased considerably in recent years, on a commercial as well as personal level. [English] Therefore, there is really no other choice but to manage so that we can use our human resources in a more efficient way. That is, we must find a way to use soft technology. We must find a new way to work as well with those Canadian citizens or businesses that do comply with our legislation. When people are crossing the border on a weekly basis and we know them, they have a relationship with the department. Therefore, programs such as the customs self-assessment program will benefit not only our relations with businesses but Canadian society as a whole. In using those technologies in providing easier access to those who do not represent a risk to Canadian society, we will be able to use our human resources in places where, indeed, there is an unknown or higher risk. I thank you very much for your time, Mr. Chairman, members of the committee. [Translation] I am pleased to begin here at the Senate with this initiative and to make my first presentation to your committee. [English] The Chairman: Before we get to questions with the officials, honourable senators, let us see if there are some policy questions that you want to put to the minister before he leaves for his cabinet meeting. Senator Angus: I would like to welcome you to the Senate. We tend to be non-partisan here and to do our best to improve the legislation on which you, your colleagues and your officials work so hard. However, I cannot resist a slightly partisan comment, although that is not normally my nature. You have mentioned "libre-échange" several times inyour remarks, which I believe means "free trade," and"mondialisation," which means "globalization." These are matters dear to my heart as an advocate of free trade. I must say, on behalf of my colleagues in the Conservative Party, how happy we are to see the government embracing wholeheartedly, through this legislation and many other gestures, the concept of free trade and the smooth passage of goods in both directions across our borders. In that spirit, we are glad to see the bill and the philosophy behind it. As the chairman suggested, perhaps you could enlighten us on the policy perspective. You have mentioned in your speech and in your press releases the customs action plan, saying that this bill is the first step in the implementation of that plan. Am I correct that this is an integral part of the government's support for free trade? Mr. Cauchon: It is indeed a reaction to what is taking place. We have free trade with many countries but our biggest counterpart by far, in terms of commercial exchange, is the United States. We have seen increasing return in volume on the commercial side as a result of the Free Trade Agreement that we signed with the United States. In addition, in terms of tourism, as I said 110 million people are crossing the border annually and 80 per cent of those come from the United States. That is an amazing volume and we have no alternative but to find ways to cope with it. We must do so in a way that will enable us to fulfil the dual mandate of the Canada Customs and Revenue Agency. I see customs as an economic development tool, but within that we must still offer good protection to our Canadian community. The Summit of the Americas was a very good example of that. We did a wonderful job during the Montreal summit. To fulfil the dual mandate, which includes the protection of our society, we have decided to proceed with a new risk management using soft technology. That is why we decided to go ahead with CANPASS customs self-assessment. Of course, the fact that we are using those technologies does not mean that we are giving up our power, and I wish to emphasize that. For example, businesses with which we have good relations will of course have access to customs self-assessment and will be able to cross the border relatively easily. However, that does not mean that we are giving up our power and they may be subject to random checks. That is the only way in which we will be able to succeed. That is the only way we will be able to use, in a more efficient manner, our very competent human resources. Last year, I met some people in the United States who are interested in border management. I met with Thomas Donahue of the U.S. Chamber of Commerce as well. They are excited by our vision and philosophy. We have established a joint pilot project with the United States in Sarnia, Ontario with regard to the CANPASS program. So far it has been quite successful. Senator Angus: Is it correct that this legislation and the entire concept of customs modernization through the action plan applies both to people and goods? Mr. Cauchon: Yes, that is correct. Senator Angus: With regard to policy, you have spoken about trade facilitation on one hand and border protection - keeping illicit goods and people out of Canada - on the other. There is a balance that you are trying to strike. I have had great cooperation and input from your officials as I have tried to understand what is going on. You have a great team working with you. You and your publicity are talking about the good things, but at the same time you are bringing in a huge list of penalties for mis-description of goods, et cetera. As a lawyer reading the bill, and in discussing it with experts in the field, my first reaction is that far from facilitating the free flow of goods, all these penalties - and I think we counted 141 of them - which could cause a lot of trouble to importers, do not seem to go to security. They seem to be more statistical. It was suggested to me that these penalties have nothing to do with protecting the health, safety and security of Canadians, but rather only provide Statistics Canada with better figures to show how we are doing in trade. It bothers the importing community to see all this red tape while you are saying that we are trying to make it easier for them. Mr. Cauchon: The customs action plan, which will be implemented over the next five years at a cost of about$100 million, will modernize the whole customs system. Before deciding to proceed with this policy we went through a year-long period of consultation with partners and stakeholders, and the customs action plan is strongly supported by stakeholders. With regard to penalties, we must understand that the system we have put in place relies significantly on the businesses. It is all about self-assessment. Therefore, we must trust people. However, if through random checks we find that people are not following the rules, we must be able to ensure that they are made to do so. People agree that the penalty system we want to put in place will be an effective tool. I know that you, as a competent lawyer, know the existing Customs Act, which contains a penalty system. You know that in the past we used the tool of seizure of goods. Very often, seizure of goods takes a significant amount of time. It makes no sense, in the economic era in which we currently live, to keep goods at the border while we go through a long legal process. For businesses that is nonsense. The penalty system in this legislation will be more expeditious and easier to deal with, and people in the business community have agreed with it. As a competent lawyer, you have seen the process and the different stages. A decision is taken by an officer. If there is an error, a decision could be changed by the same officer or another competent officer within 30 days. From 30 days to 90 days, an appeal can be made to the minister, after which the matter can go to the Federal Court. This process will protect the right of business to fairness and due process. That will be managed in a very professional way by competent people. Yesterday, Mr. Lefebvre and I each delivered speeches to customs officers in Montreal. There were about 150 customs officers there. We told them about our vision. We also told them that the customs action plan will be implemented over the next five years. We do not pretend that the system is perfect, but we must find a way to monitor the situation. That is why I told them yesterday that their feedback will be important in order for us to make adjustments. As well, feedback from all the stakeholders will be important. I believe that what we put into the legislation concerning the penalty system will meet the needs of all parties. We will make some adjustments throughout the years, if it does not work the way we would like it to work. Of course, we will be more precise in the regulations which will follow. Senator Angus: One of the things that interests me, and it must be of great concern to your department, is the "intermeddling" - if I can use that word - of the criminal and the civil. What we are talking about here is a civil process, that is, the modernization and the free flow of goods and services in world trade, which is a great thing. We are now all on the same page. We want free trade. We want to buy into it. We want to make it happen. What I perceive flowing from the current legislation, which is very draconian in many of its aspects, is being perpetuated in this bill. You have said that you have the burden to protect our borders and to preserve the values of health and security, which I understand, for example, would include enforcing zero tolerance on the illicit drug trade. Honourable senators, there is one anecdote that I would like to recount, which would give the minister an opportunity to explain how he will get around this. About three years ago, a ship came into one of the ports in northern Newfoundland. The ship had been loaded with newsprint, which is a very important trade for Canada. These ships operate on a tight time-schedule. Some stevedores in a port in another part of the world found some traces of illegal substances up in the beams of this ship when they were unloading it in preparation for taking on this shipment of newsprint to Newfoundland. The vessel had a market value in the $9 million to $10 million range, which is quite cheap for a ship. Customs seized that ship, not as a result of a legal proceeding but because it had the power - almost by divine right. It impounded the ship and exacted a $10 million security from the owners of the ship before the ship could carry on, load the newsprint and go on with the free flow of goods. All of this was for a suspected offence that related not at all to the trading of that vessel. I observed this and said to myself, "There is something wrong here. This is not a provision that facilitates trade or enhances the reputation of Canada." Using that anecdote to illustrate what was in place under the old law, could you answer my question? I am afraid the new law goes further. There are penalties of up to $25,000 for an importer who does not describe correctly a truckload of boxes containing shirts. If it is not shirts but trousers, who really cares? If some guy is moving them and a customs broker does not describe the goods accurately, then he is on the hook for $25,000. I find that to be dangerous. Mr. Cauchon: Concerning the question of the seizure of vessels carrying drugs or other contraband, we have no choice but to act rapidly. There is always the possibility that a company can put up some security. We are not the only ones involved in such situations. Each and every time something like this happens, we have to work with the RCMP and/or other police forces. That is why we cannot take any risks. As far as the question of drugs is concerned, of course the legislation is quite rigid. However, there is no other way for Canadian society. Second, when you refer to the question of a shipment of t-shirts infringing on Canadian legislation in terms of trademark, the same rules would apply. Indeed, I do not believe we have much of a choice but to seize the goods and to stop the vessel as well. One item that you may have the chance to look at in the legislation, and Mr. Lefebvre may be able to help me out, concerns what we call the "third-party provision." I will not go further in that direction because I do not know if it would apply to a vessel. However, let me give you a good example of a third-party provision. Let us say that a stolen truck containing cocaine crosses the border. If the truck is stopped at the border, everything will be seized. Let us say that the real owner of the truck was not involved in any way with this scheme. There is a provision in the new legislation that will ensure that this person will get his truck back. Such a third-party provision is very helpful. I do not know if we will be able to apply it to other situations. As I said at the beginning of my remarks, we are not pretending that the system is perfect. Over the next five years we will work with stakeholders and our customs officers to ensure that the legislation is applied in the best way possible. Senator Angus: I expect other senators will ask about reports that have recently appeared in newspapers - I refer to alleged breaches of citizens' privacy. When I talk about the "intermeddling" of the civil and the criminal, it is a very serious thing. In order for law enforcement agencies like the police and the RCMP, who have the real mandate to deal with drugs, to get a warrant to seize a truck, or ship or to grab T-shirts they must swear information that gives a lot of detail. They must have the evidence or at least reasonable cause to get that. However, they have been using your department's extraordinary powers of search and seizure for other means. From a policy point of view I would like some assurance that the government will put a stop to that practice so that criminal activities, and criminals, will be dealt with by means of the criminal law. The bill before us is a civil law that is to enhance and facilitate trade. That is my point. Mr. Cauchon: There is a relationship between criminal law and civil law in many pieces of Canadian legislation. It is nothing new. With regard to the point you raised about privacy and the ability to stop and seize without a search warrant, you must first understand that when a person crosses the border it is a very special situation. A person who does not live in Canada can get into the country, so we must act very quickly. Under the legislation we must have reasonable grounds before we act. You referred to the question of mail; we must have reasonable grounds to act in that regard. There are criteria to be respected in section 99 as well. With regard to mail, the privacy commissioner studied section 99, discussed it with the department, and concluded that we are acting lawfully and in good faith. I spent a couple of hours going through the system at a postal centre and I can tell you that customs officers apply the law as it should be applied. I asked many questions to ensure that all the criteria in section 99 were respected. I am fully satisfied that customs officers are acting under the criteria of the legislation. Finally, I would like to address the question of privacy. Privacy within the perimeters of our country is one thing, but privacy at the border is something different. The Supreme Court of Canada has confirmed that at the border the expectation of privacy is lower in the sense that the public interest takes precedence and the customs legislation is paramount. This does not mean that we act illegally. However, because of the public interest we need tools to protect Canadian society. I was appointed Minister of National Revenue in August of 1999. Since then, I have seen customs officers carrying out their work professionally. They will receive good training in thenew powers that they will have. There is always room for improvement and we are working hard on that. We are trying to do much better business, and that is what the customs action plan is all about. [Translation] Senator Bolduc: How many provisions in this bill confer regulatory authority on the government, and how many on the minister? Mr. Denis Lefebvre, Deputy Commissioner, CustomsDirectorate, Revenue Canada: Some nine regulations will be amended, while three new ones will be added by way of the proposed legislation. Senator Bolduc: Are you saying then that a dozen or so separate regulations will ensure that the bill, as amended today, will be implemented? Mr. Lefebvre: That is correct. Senator Bolduc: Therefore, the bill confers additionalregulatory authority. Is that what you are saying? Mr. Lefebvre: The series of regulations in effect pursuant to the Customs Act have been amended to allow for new ways of doing business. [English] Senator Bolduc: Are those regulations already prepared, or are they in the process of being prepared? Mr. Lefebvre: We are in the process of developing those regulations, and all of those regulations are being developed in consultation with stakeholders in general, including brokers, importers, et cetera. Senator Bolduc: You have discussed them with those people but not yet with Parliament? Mr. Lefebvre: The regulatory process provides for pre-publication, but you are right, they are not yet final. We are in the consultation process and could table a final draft at this time. Senator Bolduc: Is it bigger or smaller than Bill S-23? Mr. Lefebvre: Much smaller. Senator Bolduc: Perhaps with more impact. As you know, I am an ex-civil servant and I prepared many regulations. It is always embarrassing to say that it is good in principle without seeing the regulations. There are some rules in the bill, but many are outside of it. It is quite embarrassing for us to say that the civil servants will do their best, the minister has good intentions, and it will work. I would have much preferred to have the regulations accompanying the bill. It would give us the entire spectrum of rules by which people must abide. After all, as you said, most people are honest, and most of the trade is regular trade. In a free trade situation, we must expect that 90 per cent of the goods exchanged accord with the rules. That puzzles me somewhat. [Translation] Mr. Cauchon: I do not necessarily think that amending the regulations is a bad idea. It is one thing to amend legislation, but to amend regulations is a far less complex process. I admit that we are not here to talk about the regulations, but rather about the bill itself. The regulations must flow from the principles set out in the actual legislation. Unquestionably, the regulations will be adopted in accordance with the standard legislative process, but only after lengthy consultations. While the regulatory aspect of the bill appeals to me, I think we will need to adjust to the realities of the next five years. The bill represents an adjustment over existing practices. It is truly a new approach to customs processes. Regulations that can be amended much more easily will help us to adjust more easily to new realities over time. For example, Senator Angus spoke of fines. The regulations will be more specific about this. If we realize in three years' time, after consulting with businesses or with customs officers in the field, that things are not working out, it will be a much simpler matter to amend the regulations. Regulations can be amended much more easily than legislation. As minister and as someone who wants this reform to go through as quickly as possible and to achieve its ultimate goal, namely to serve all Canadians well, I am not opposed to regulations. [English] Senator Bolduc: In other words, you are not against giving additional power to the minister, because the implicit postulate of your attitude is that you are a benevolent administrator. Mr. Cauchon: The minister is accountable, so it is not a bad solution. Senator Bolduc: But is the agency as accountable as it used to be? Senator Angus: On a point of order, perhaps while the minister is here we could consider something that I observed in another committee where the enabling legislation was before us on a more or less urgent basis. [Translation] As the minister said, there is an urgent need for this legislation. [English] However, where the enabling powers were such that new powers would contain the real substance of the new regime, the minister undertook, in a letter to the chairman of the committee, to give the committee copies or allow us to see the regulations before they were gazetted. In other words, perhaps the minister could table the regulations with the Standing Senate Committee on National Finance. I do not know whether I should put that in the form of a question to the minister. I have asked a number of questions through my staff to your officials. For the questions that concern me the most, we have received positive indicating that those items would be addressed in the regulations. Basically, the answers were satisfactory. We have not seen the regulations. [Translation] People take it for granted that we are acting in good faith and that these words are true. Would it be possible for the committee to review these regulations before the bill is sent back to the Senate? [English] If the regulations are nearly finished, it would enhance the process to see them in advance, as they are very much a part of this bill. That is just a thought. We did that with the Standing Senate Committee on Banking, Trade and Commerce and it worked well. The Chairman: Is there a pre-publication process for these regulations? Mr. Cauchon: There is a pre-publication process. The Chairman: Perhaps it would be possible to receive them at that time or before. Mr. Cauchon: There are two points. Senator Angus said that it is urgent to proceed with the bill. I wish to be clear. We do not wish to rush the Senate or the House of Commons. There is a process and we respect the process. We are here today because we respect the process highly. We must recognize that we have been going through a huge period of consultation with stakeholders. Businesses want to see the implementation of our customs action plan as soon as possible. The first stage of implementation is set for October 2001. That is why we are seeking the quick process of this bill in order to help those business communities that expect to see the first stage of the customs action plan in the fall. In response to the question of regulations, there will be a public process. There will be a chance to review the regulations following that standard and public process. We know that the question of penalties must be addressed this fall. That means that we would have to return to committee during the summer or the beginning of September. I draw the attention of honourable senators to the possibility that that may delay the entire system. If we are following the standard process in order to proceed with the enactment of regulations, one member could have access to all the regulations needed. The team that is here today has been doing wonderful work. Mr. Chairman, I would like to thank the team. They have been available to you and other members as well. I wish to assure you that regarding the regulations, members of the team will act in the same way. If you have any questions about the regulations, once published, we will be more than pleased to assist you. Senator Bolduc: Having been a member of the regulatory oversight committee for three years, I have seen many regulations, Mr. Minister. Department officials may wish to do their best, but many departments have gone somewhat overboard. Mr. Cauchon: Senator, I have been involved with the process for some time now. The proposed legislative package before this committee is not just simple amendments to an act. Bill S-23 is a huge reform to the customs act; it changes the whole pattern and the way we work with businesses as well as the philosophy of the department. The substance is really in the bill. [Translation] Senator Bolduc: My colleague and I have not called into question the fundamental philosophy behind this bill. When 500 billion shipments and 100 million individuals cross the border, it is time for different processes. Technically, I have no idea how you plan to proceed. I know that in the case of one Toronto highway, users have a sticker on their vehicle and receive a bill through the mail. I would imagine that a similar approach would be used so that people can clear customs without having to wait 45 minutes. People are now required to complete a customs declaration form, just as they must complete a tax return. New technologies make this possible and we have no quarrel with this approach. The agency is a bureaucratic organization. [English] By the way, minister, it is not a department any more. You can talk to them, but you must also be polite. They went overboard. [Translation] That is dangerous, as you are well aware. [English] Mr. Cauchon: The agency is not an arm's length corporation. The point is interesting. The Canada Customs and Revenue Agency is a new government agency; it is a hybrid. It is not a ministry; it is not an arm's length corporation. Senator Bolduc: We studied that here when it came. Mr. Cauchon: The power of the minister is exactly the same. If you take the power that we had when this was a ministry and the power now, it is exactly the same. The Canadian population wanted to ensure that there was a person accountable to the House of Commons. What I can tell you today is that I hear your concern. I understand your concern. You want to ensure that regulations will be made within the bill that you have in front of you. Senator Bolduc: We wish to ensure that the spirit of law is reflected as well. Mr. Cauchon: The department gets the message. What I would like to tell the members, Mr. Chairman, is that if there are any concerns once the regulations are published, we will be more than willing to have briefing sessions and to review them. The Chairman: Let us put some dates on this, minister. You want the new regime to come into effect on October 1, 2001. What is your timeline here? Are you publishing the regulations in draft? Mr. Lefebvre: As they are being drafted, consultations do take place. When we have the final draft, we will pre-publish in accordance with the rules. The Chairman: When will you do that? Mr. Lefebvre: Those regulations that are necessary for the parts of the programs that come into force in October must be pre-published during the summer. Senator Angus: Are you referring to the Canada Gazette process? Mr. Lefebvre: I am referring to pre-publication. We must pre-publish all regulations and leave them with the stakeholders for a period of time. We will receive their comments and then finalize and approve the regulations. The Chairman: Do you hope to have all that done before October 1, in respect of the regulations? Mr. Cauchon: The exact date is October 31, 2001. The Chairman: That should give us time. The regulations are pre-published, senator, they are not in effect. When they first appear in the Gazette, they are not in effect. They are pre-published precisely for the purpose of consultation. After the consultation takes place, then the cabinet or cabinet committee gives its imprimatur to the final version. Senator Angus: We are getting to the point that I was asking for. Perhaps we could receive an undertaking from the minister that when the regulations are finished and ready for pre-publication, which hopefully will be soon, that we will see them. The Chairman: That should be by this summer. Senator Angus: When is "this summer?" The Chairman: June 21. Senator Banks: I am sure that the minister has received a letter from some of the labour people involved with customs officers. This letter is highly critical of the process wherein, by their estimate, half of the customs officers that are on duty at customs crossings in Canada during the summer are students with two weeks' training. This is the allegation in the letter. I wonder whether, a year from this summer in the institution of this new regime, you will have confidence that those summer replacement students - who have what is alleged to be minimal training - will be able to protect us all from the bad guys. Mr. Cauchon: First, I would think that the hiring of summer students is a good thing for the agency. Working at the border is also a wonderful experience for the students themselves. I have met many people who worked with customs when they were students and they have fond memories of that experience. I am told that those students go through three weeks of training. We must bear in mind that they are summer students and that they fulfil certain, but not all of the duties related to a customs officer. They work in cooperation and partnership with our customs officers. We ensure that each and every time they are involved as a customs officer on the front line they are able to carry out their work properly. I should like to tell you that this is an ongoing discussion with the union. It comes up often. The students do not pay dues to the union. Basically, we all agree that to have summer students is a good thing. There is a question of training, but we do believe that they receive enough training to fulfil the work they are there for, and they do not have all the power of a customs officer. We did proceed some time ago at different ports with official powers. Of course, summer students would not exercise official power because they have not had the training. Therefore, in some circumstances they do not have the ability to work. As well, using summer students is a good recruiting tool as well. After the summer, if they are interested, we can sometimes find good prospects within the team who will eventually become good officers. Senator Banks: To oversimplify, if there are at a place 100 trained professional customs officers on call, one assumes that during the summer a number of them are off. Therefore, the complement of people at the border, whose job it is to enforce some aspects of the criminal problems that we discussed, would be reduced by whatever proportion of that team would be summer students. If I were a smuggler, I would deduce that 40 per cent of the professionals will be gone during the summer so I might only need to get past a student. Is our capacity to protect against smuggling of contraband, et cetera, in any way compromised during the time that we are employing these students? Mr. Cauchon: I am told by the department that we are always well equipped to face the situation based on the human resources and tools that we have. During the summer, the students do not take the job of any other officer. Our customs officers can have their vacation whenever they want during the summer; the students sometimes act as replacements. However, when we look at the vacation schedule we ensure that at each and every land border, airport or port authority, we have sufficient and competent human resources to fulfil our duties. As I said, we would not put Canadian society at risk. Of course, with the increasing volume that we have faced over the past years in terms of goods and in terms of people crossing the border, we really need the customs action plan in front of us to do a better job. The proposed legislation is all about doing a better job to ensure that we fulfil the dual mandate of customs. Senator Bolduc: I would like to return to two small questions. First, how many people do you have in the agency? Mr. Cauchon: That depends on the time of the year. Senator Angus: Not including summer students. Mr. Cauchon: It is approximately 42,000 or 43,000 people on average. During the tax season, of course, it goes up to 47,000 or 48,000. That is an average. Senator Bolduc: How many customs officers are there? Mr. Cauchon: There are 7,000. Senator Bolduc: Is there a classification in the entire system that you call "customs officers"? I would like to have an idea of how many operators you have at the borders that we call "customs officers." Mr. Cauchon: On the whole team it is 7,000 customs officers. I am told the number of officers working at the land borders, airports and port authorities is approximately 4,000. Senator Bolduc: Each of them will have all the delegated powers that are implied in clause 2(3) of the bill. That is at the very beginning of the bill. The Chairman: Read it, please, Senator Bolduc. [Translation] Senator Bolduc: Subsection 2(3) reads as follows: Any power, duty or function of the Commissioner under this Act may be exercised or performed by any person, or by any officer within a class of officers authorized by the Commissioner to do so [...] [English] Senator Angus: It is interesting that that particular section is in French twice and not in English at all. [Translation] It is quite delicate. [English] The Chairman: That is just to ensure consistency between the French and English. [Translation] Mr. Cauchon: The purpose of the amendment was to correct the French version, and that is the reason why the text appears in French on both sides. [English] Senator Bolduc: The delegation power involves 4,000 people. Those are considerable powers. Mr. Cauchon: It is part of their work and it is part of their function. The question is good because it obliges me to be more precise in the sense that we will fix parameters. We will have materials as well. When our customs officers are involved in exercising their power they have manuals of reference. We will need to do the same thing. That is part of the job. Senator Bolduc: I see in another paragraph that the minister, or any officer designated by the minister, for the purpose of the section, may at any time waive or cancel all or any portion of any penalty, or interest, otherwise payable. That is a considerable discretion for the minister. I suppose you will fix some parameters for yourself, too. Otherwise it may become patronage. Mr. Cauchon: In regard to the penalty system, we will have regulations on that. Senator Bolduc: It is not provided here that it will be by regulation. You may do that by your own will. Mr. Cauchon: We will have to fix guidelines. There is no way around that. As I said to Senator Angus earlier, there is a due process in the legislation. It is possible to make corrections; it is possible to appeal to the minister. It is possible to go to the Federal Court. The due process of law has been respected. The scheme that we have within the Customs Act is a scheme that is found in many other Canadian laws. There is a good balance, but we must ensure that the legislation will be applied in a reasonable manner. Senator Angus: There is one area, minister, that is key. I have discussed it with some of the officials in the agency. As good as it is, if we all buy in to the modernization, as everyone does, as Senator Bolduc said, in the normal course of trading we would allow these trucks to come zooming through the borders, pre-clearance. I am told that the provisions in the proposed legislation will only apply to a relatively minor portion of goods flowing into Canada because there are other statutes that regulate trade. For example, the Health Act regulates the movement of pharmaceutical products. That is a huge proportion of imports. The Agriculture Act regulates the import of groceries, produce, food goods and so forth. There is no naughtiness in my question. Once you figure it out, it jumps off the page. Is it not much ado about nothing? Here are these wonderful things, but if we do not bring in all of the goods that are moving in trade into Canada, what is the point? What is your plan, from a policy point of view, for sweeping these other things into your net? Why should we proceed in a piecemeal basis? Mr. Cauchon: The question is quite correct in the sense that not all the goods will have access to, for example, customs self-assessment. Overall, looking at the volume that we deal with on a yearly basis, approximately 45 per cent of the goods crossing the border today could have easy access to customsself-assessment. You mentioned that some goods may have to respect some regulation or other legislation, for example, Health or the Canadian Food Inspection Agency. I agree with that. Those carriers will still have to respect that legislation and regulations. Within the next five years, we will work with those organizations and agencies to find a way to, first, fulfil the obligations of that other legislation, but at the same time use the technology and philosophy that we put into place at Customs Canada. We work in partnership with the Canadian Food Inspection Agency. They are aware of our legislation. We would like to proceed with the first step. The first step is to implement the system, and to improve it as well. Once that is done, we can work with the other partners to ensure that goods will have broader access to CSA. Your point is good, but we must start somewhere. My main goal is to ensure that one day we will be able to facilitate the crossing at the border of goods that are indeed regulated as you just stated. Senator Angus: Minister, on this subject, some importers have told us that because you are proceeding - maybe my description of it as a piecemeal basis is the wrong one, but you know what I mean - some say it is a recipe for disaster and confusion. We have all been at the borders, and many Canadians are confused today. What does free trade mean? When they travel to New York for the weekend, they are still filling out forms. All of this red tape is in front of Canadian citizens. The smaller ones, like us, do not see the manifestation of free trade. These importers are saying that as good as it sounds in the minister's press releases and in what they are hearing today, if their truck comes to the border and gets in line for the transactional basis type of thing, because they are not under an act that you have on side, and if other trucks that left Albany two hours later come zooming by while these other guys spend hours at the border dealing with the clearance procedures, then it could cause all kinds of problems. For example, whereas in the past they would have different categories of goods in the same truck, now they are saying they just will not adopt this self-assessment and they will stay on the old way. Does it make sense to proceed prematurely - another word that is maybe not appropriate - or before you have the whole thing ready so that it applies to all importers of legitimate goods? That is the question I find perplexing. Mr. Cauchon: Senator, there is a new philosophy. It is something new. It uses technology. As it proceeds on a stage-by-stage basis, as I said, 45 per cent of the goods will have access to customs self-assessment. Because it is new, we will have to improve the system over the next five years. Your concern in regard to goods not having access is a valid concern. However, in the legislation that we hope to put in place based on the package that we have, all goods could have access to customsself-assessment. If you import vegetables, you have to go through the Canadian Food Inspection Agency. We will have to work with that organization. At this point in time, as I said, we will work with those organizations order to bring other carriers inside the CSA. At this point, there is nothing that would prevent the Canadian Food Inspection Agency from asking Customs Canada to approve one of their carriers. If they have a good relationship with the business, they know what they import to Canada. Over the next few years, we will have to work on that. You mentioned the problem with regard to the mixed load: carriers showing up with customs self-assessment approved goods and, for example, health products that must go through Health Canada regulations. We can make sure they go through customs and get to the warehouse, and then the customs self-assessment products will be delivered to the customers while the other part is waiting for a customs clearance. This arrangement could be made easily. We are working with businesses to fully implement that. You are right. We do not pretend that the system is perfect. It is something brand new - something that other countries will watch. We are seen as a sort of pioneer at this time in terms of customs. The United States is fascinated by what we are doing. We wish to proceed on a stage-by-stage basis. I am sure that, within the next five years, that reform will be in place and we will have one of the best customs systems in the world. Senator Angus: To conclude my questioning on this subject, I hear over and over again in Europe, or in the customs union or the European community, that the catch word is the "free movement of goods." It is a free trading zone. There is none of this segmentation or exclusion. People there move across the borders much more freely than we move to and from the United States or Mexico. I think that we are not getting it done. I realize how complicated it is and that we live in another hemisphere. However, the European Community seems to have got it. They do not have a big problem of crime and illicit movements between the countries in the customs union. We are either having a customs union or we are not. We are halfway there, but it could be complicated. Mr. Cauchon: The community in Europe works with what is known as the "four movements," and among those is the free movement of goods. We must understand that in North America we do not have a customs union. Tariffs have legislation. Food legislation differs among countries. Even though they have a customs union in Europe, they still have a customs officer in every country to control the perimeters of Europe. Second, when something like foot and mouth disease happens, you must protect your country. That is an issue of public interest and public safety. At such times, the customs officer has an important role to play, even when you have a customs union. Senator Angus: That is something worth keeping in mind because the people to whom you are accountable get confused by all the new regulations in the name of facilitation. There is red tape all over the place while in Europe there is none. Mr. Cauchon: I have no doubt that the more we proceed in the direction of free trade and the global marketplace, the more we will have to concentrate on the issue of the perimeters of North America. For example, last year we went through a benchmarking process with regard to airports. We have basically the same system and we will have to target the perimeters of North America to protect the countries and to ease the crossing of goods and people across the shared borders. This is what we are doing with this legislation. We would, of course, like to proceed using the same philosophy. As I said, we have a common pilot project in Sarnia. We started the CANPASS project for people under which an individual can go to the United States and return to Canada using one card. Perhaps in ten years, or even sooner, that will be the way our shared borders will work while concentrating on the perimeters. Senator Angus: I was staying away from the privacy issue, but it is a high profile issue. MPs and senators get a lot of calls about the apparent unreasonable discretion of customs officers to open people's mail without a search warrant. This falls under the concurrent jurisdiction of the Minister of Immigration Caplan and yourself. It is true that the Privacy Commissioner has said that what is happening is not illegal and, on the face of it, has nothing to do with this bill. As I understand it, under the current law customs officers have the right to open any mail coming into Canada weighing 30 grams or more. This bill will give the same powers for mail going out of Canada, so that certainly brings it within the mandate of our study of this bill. I am personally oriented to law and order. I like our law enforcement officers to be able to do something effective. However, Canadians generally seem to be quite outraged that there is unbridled discretion to open mail. I think it arose because of a particular immigration problem, if I read the media correctly, although I did learn a long time ago not to believe everything I hear in the media. Is this just "un cas d'espèce" or is there a policy issue that makes it necessary for your officials to be able to open and inspect mail on a random basis? I find "inspect" to be a curious word. How can you inspect mail and not read it? Mr. Cauchon: The problem of goods getting into Canada through the postal stream has raised a significant amount of concern. It is first a question of privacy. As I said, when one gets to the border the expectation of privacy is lessened because of the public interest, which is recognized by the Supreme Court of Canada. Second, within the legislation customs officers have the general power to inspect goods when they arrive in Canada and when they leave Canada. Canada Post asked us to be more specific with regard to the postal system. We have one provision for when goods enter Canada. In the bill before you there is provision for goods leaving the country. This is not a discretionary power per se. Clause 99 of the legislation says that if it is thought, on reasonable grounds, that the goods may be subject to the customs tariff or illegal under any Canadian legislation, the officer has the right to open those goods. As you said, senator, it is stated that the mail must weigh more than 30 grams. We do not read letters just for the fun of reading them. Much attention is paid to immigration, but we do not target only immigration. There are plenty of other goods that could be subject to the customs tariff or illegal, such as drugs. The power has been very useful in the past and the exercise of the power is carried out lawfully and in good faith. It is the same for goods leaving the country. It is important to have this provision for goods leaving the country because we have links with information agencies all over the world. If we get information, for example, that industrial secrets, which could put at risk the security of our nation will be sent through the mail to another country, what would we do without the power to stop the goods getting out of the country through the postal streams? It is the same thing if pieces of our Canadian heritage are sent in boxes outside the country using the postal stream. If documents or literature that are illegal here were sent out of the country, why would we not stop those goods? We do not want those powers for the pleasure of having them; we want them because they are essential for the customs department. The department has told me that they have been applied lawfully and in good faith. That has been stated as well by the Privacy Commissioner. Senator Angus: I hear you. It makes good sense to me, but I just want to walk you through this point. The PrivacyCommissioner said, as you did, minister, that what is being done is not strictly illegal. In fact, it is quite legal. However it is wrong from a privacy point view. He is the Privacy Commissioner. He recommended a new policy to the Minister of Immigration. That policy would be that if no solid object were detected, such as, a passport or a plastic citizenship card that might be counterfeit, the envelope should be turned over to the immigration department without being opened by the customs. Is there anything that the CCRA can do to comply with the Privacy Commissioner's recommendation? That topic has come up in question period in the other place. Mr. Cauchon: A few questions have been asked in this regard. First, the Privacy Commissioner is doing his work. He is the watchdog of privacy in Canada, and I do believe that he is doing good work. However, we must find a balance between his goals and those of customs. One must bear in mind that we cannot look at every document. That is impossible. We cannot look at all the goods that are coming into Canada through the postal stream. That is impossible. We are working using some samples, while respecting the criteria in section 99, as well. We do not target immigration documents. I have seen customs officers working. They recognize the questionable boxes often. If it is a book subject to tariffs, they have reasonable grounds to stop the package. They know that it is subject to customs tariff. They refer it for clarification. If they see, for example, certain types of boxes coming on from country X, they know from experience that those types of boxes will contain goods that are illegal in Canada. Senator Angus: Perhaps, it would be boxes of nice Cuban cigars. Mr. Cauchon: They would stop Cuban cigars as well. They know what they are doing. They often seen patterns because similar boxes are arriving often. As part of that, how could we ask for a search warrant if we do not know what is in the boxes? The officers must ask for a search warrant for immigration documents only. When we have an envelope of more than 30-grams arriving, we do not know what is inside it. It is left to the judgment of the customs officer, based on the criteria and parameters of the legislation. We do find immigration documents sometimes, not all the time. When they do find immigration documents, they refer them to the immigration department. I do not know what that department does with the documents. I do not know, but I believe it has been useful for them in the past. It has been useful for society, as well. Senator Angus: If I understand your answer, and I find your answer cogent, you are saying that the recommendation of the Privacy Commissioner that these documents or packages be sent along unopened to the immigration department, makes no sense. That is what I hear you say. I tend to agree with you. The Privacy Commissioner is too focussed on immigration. Your dealings cover the waterfront. Mr. Cauchon: I am saying that the Privacy Commissioner is doing his work. He does very good work. However, based on what I have heard, the question should be asked to the immigration department if the recommendation is feasible on their side. The customs department is the one that finds immigration documents. We must be realistic. We do not know if an arriving document is an immigration document. An officer, in exercising his power, must decide on reasonable grounds if the item might be subject to tariff or be illegal. In that case, they open it. I do not think that it would be practical or workable to have such a provision within the legislation. I understand what the commissioner is saying. I do respect that. As I said, we must find the right balance. From what I am told, implementation of that recommendation would not be practical. [Translation] Senator Ferretti Barth: Minister, I note that you have expanded the CANPASS permits program. First of all, has this new program component already been implemented? Secondly, if so, has the program proven to be successful? Thirdly, how does one go about obtaining a CANPASS permit? I have yet to receive any information on the subject. Fourth, are there customs officers at border points who can help seniors who speak neither French nor English or who are illiterate? These individuals often travel in groups and when they cross the border, it can sometimes take up to three hours for them to clear customs. Fifth, how much will seniors have to pay for a CANPASS permit? Mr. Cauchon: Currently, the CANPASS program is a pilot project. CANPASS permits are issued for only one border crossing point. Permits cannot be used at all crossings because the necessary links are not yet in place. This pilot project has been a success, hence the reason for wanting to expand it nationwide. The CCRA will be promoting the program and to sign up, people will be ask to complete a form. Permits will be issued free of charge, with the exception of airport permits which will carry a minimum charge. Senator Ferretti Barth: Since each individual is required to complete a customs declaration form, are officers available to help people who may need some assistance? Mr. Cauchon: Throughout Canada, departmental employees are trained to provide this kind of assistance. Furthermore, employees at the various harbours and airports are available to help people who may require some assistance to complete the necessary forms. Senator Ferretti Barth: You stated that the cost of these permits is fairly reasonable. Is that correct? Mr. Cauchon: The CANPASS permit for land border crossings is free. There will be a charge for airport permits. Senator Bolduc: I have two questions for you, Minister. First of all, since the agency is no longer part of a department and expenses are covered by the Consolidated Revenue Fund, where does the CCRA get its funding from? Mr. Cauchon: The same system is in place, that is to say our budget funds are approved by Treasury Board. Senator Bolduc: I am aware of that and I am happy to hear you say it. Is it you intention to use a fee system such as the one you spoke of for airports to secure additional operating funds without having to endure the climate of budgetary austerity imposed by the President of the Treasury Board? Senator Angus: To supplement your budget, so to speak. Senator Bolduc: Correct. Will you bring in more revenues as a result of these fees, money which you can then use to manage your internal operations? Mr. Cauchon: When we applied to cabinet and to the various cabinet committees for the funding to undertake future customs reform initiatives, as I recall, we received $87 million. However, a total of $100 million will be invested in reform over the next five years. We considered the whole question of fees that could be charged as part of our budget process. To answer your question directly, I would have to say that these fees will not be used as a means of supplementing our budget. Senator Bolduc: They will not be viewed as revenue for administration purposes? Mr. Cauchon: I understand the question and I will respond directly. Senator Bolduc: Mr. Chairman, this will be my final question. I know the minister's time is valuable and I do not want to take undue advantage. I put up quite a fight back when your bill was adopted. The then minister, the Honourable Herb Dhaliwal, as well as a number of officials, appeared before our committee. [English] You are no longer in the civil service, as such. There is one basic principle that should be in the bill: it is the "merit system" for the recruitment, selection and promotion of employees of the agency. The minister did not accept that. I tried again, with an amendment in the Senate, and my friends on the other side said "no." You should at least have the principle of the merit system. The merit principle should be entrenched in the legislation so that recruitment is performed on the basis of merit and competence. Promotion should be done the same way. I am not saying that all the processes of the Public Service Commission should be incorporated, but the principles should be there. As well, there should be some light administrative processes that include, and this is in my opinion, competition for the advancement and recruitment of people. Mr. Cauchon: I have been told that the issue has been raised in part of the proposed legislation. Senator Angus: Does it apply to summer students, too? Mr. Cauchon: Second, we are still part of the public service. Actually, the difference with the agency is that the board of management is taking care of the question of human resources with the commissioner and the assistant commissioner. The agency will give the department the possibility to be more flexible in its dealing with human resources. Senator Bolduc: On that I agree. Mr. Cauchon: As I said, on a yearly basis we have 42,000 people working for the department; at tax season that figure increases to 47,000 or 48,000 people. We need to have our own rules. Senator Bolduc: I agree with that. Mr. Cauchon: I have been told that the issue is part of the proposed legislation. Senator Bolduc: It did not exist when we passed the bill; I remember well. When one leaves the public service, the employment act of the civil service no longer applies. Mr. Lefebvre: The employment act does not apply, but in our act it says that appointments are based on merit. To ensure that basis, the Public Service Commission reviews our appointment procedures each year. In that way they ensure that we respect the merit principle. Senator Bolduc: Does that include promotion? Mr. Lefebvre: Yes. Senator Bolduc: Do you have internal reviews for promotion? Mr. Lefebvre: Yes. The Chairman: Thank you for coming today, minister, to respond to our concerns and questions so thoroughly. Senator Angus: I look forward to an opportunity when the officials might appear before us again. I confined my questioning to the policy issues. There is a significant amount that bears explanation at any given time. I raised that in my speech at second reading. In the interests of time, it is up to the chair whether to proceed with this now. The Chairman: How much time do you need, senator? Senator Angus: It is a question of how much study we want to do on the bill. Today we received a sense of the government's philosophy and where it is going. We highlighted the fact that the minister agreed that this is the first step only; there are definite flaws and issues that must be overcome to accomplish the real goals of the customs action plan. I can continue now, but it is getting late. The Chairman: The bill is different in this sense: It is a fairly hefty government bill that originated in the Senate. We must give our sober first and second thought at the same time. It will not be back to us unless they amend it in the commons. Senator Angus: Should we do it in the morning? Is that what you mean? The Chairman: If the officials are available, we could have them back for a while tomorrow, at our regular time of 5:45 p.m. I had hoped to have witnesses from the private sector and professional groups here tomorrow. However, none of them are available, so I will put them over. The steering committee has consulted on this. We have had to put them over until next Tuesday. If the officials are free to come tomorrow, we can pursue some of these details. [Translation] Mr. Lefebvre: We are available, Mr. Chairman. [English] The Chairman: Thank you. We will meet at 5:45 p.m. tomorrow. The committee will also meet next Tuesday. We have confirmed witnesses from the Canadian Bar Association. If witnesses from the Canadian Institute of Chartered Accountants are available, they will appear and form a panel with the Canadian Bar Association. We also have the Association of Importers and Exporters confirmed. If one of the grocery manufacturers and distributors' organizations is able to come, we will put them on a panel with the importers and exporters. We will see where that takes us in terms of clause-by-clause and any amendments that senators may wish to propose. Does that sound reasonable? Hon. Senators: Agreed. The Chairman: Thank you again, minister and officials. Thank you, Senator Angus, for joining this committee specifically for this bill. Your assistance has been invaluable. The committee adjourned.